The statement confirms that OnLive services and all future developments will continue with "no expected interruption". Here's the full statement (Via The Verge):

"We can now confirm that the assets of OnLive, Inc. have been acquired into a newly-formed company and is backed by substantial funding, and which will continue to operate the OnLive Game and Desktop services, as well as support all of OnLive's apps and devices, as well as game, productivity and enterprise partnerships.

"We apologize that we were unable to comment on this transaction until it completed, and were limited to reporting on news related to OnLive's businesses. Now that the transaction is complete, we are able to make this statement."

Staff cuts - reportedly affecting around 50 per cent of employees - go unmentioned, as does the identity of the buyer. Large numbers of staff were seen leaving the OnLive offices today clutching boxes full of belongings.

Most importantly to customers, however, is the fact that the OnLive service will apparently go unaffected - relieving news for those stunned by last night's initial OnLive closure reports.

A now laid-off OnLive employee has revealed that the cloud gaming company has been purchased by an 'unknown party'. Citing the anonymous insider, Engadget reports that the mass of layoffs today have affected around 50 per cent of staff, which comes as the firm makes "across the board cuts", adding that no severance will be offered and "stock holdings are essentially worth nothing".

According to the site, "Those being kept on have reportedly received offer letters from the new company,".

The source suggested that the firm's huge operating costs - apparently around $5 million a month - are partly to blame for the sudden and surprising move.

CVG has again reached out to OnLive for response on the latest reports.

Update: TechCrunch corroborates the report, citing 'a reliable source' as saying that CEO Steve Perlman has found a buyer, and the party "wants all of OnLive's assets - the intellectual property, branding, and likely patents". The site's source suggests that the cuts were made "to reduce the company's liability" as the takeover goes through.

Reports have emerged that cloud gaming firm OnLive has laid off all its staff and "will no longer exist" by the end of today.

InXile Entertainment CEO Brian Fargo said on Twitter that he received the news via an email from an OnLive employee. The email read, "I wanted to send a note that by the end of the day today, OnLive as an entity will no longer exist. Unfortunately, my job and everyone else's was included."

It went on to say, "A new company will be formed and the management of the company will be in contact with you about the current initiatives in place, including the titles that will remain on the service."

Fargo notes that a request to recall the email arrived minutes after the mail itself.

OnLive's director of corporate communications Brian Jaquet has responded to questioning over the firm's reported closure, saying, "We don't respond to rumors, but of course not."

Jaquet has also told Mashable, "no comment on the news other than to say, the OnLive service is not shutting down". Jaquet refers specifically to the OnLive service however, and doesn't confirm or deny the layoffs.

Kotaku, citing a "source inside OnLive", reports that OnLive CEO Steve Perlman told staff in a meeting this morning that the firm is filing for an 'Assignment for the Benefit of Creditors' (ABC), an alternative to bankruptcy that 'affords financially troubled companies a level of protection from creditors'.

According to the source, the OnLive service will "probably" continue, but "the company as it stands now would cease to exist" and "no one would be employed by OnLive".

"A subset of employees would be brought on to the company created from the remains of OnLive," Kotaku was told.

CVG has reached out to OnLive for clarity.

Update:IDG News correspondent Martyn Williams, who's perched outside the OnLive building just north of San Jose, California, reports having seen three people leave the building carrying 'leaving boxes' in the past few minutes (as of around 2pm (PDT), Friday August 17).

Update 2: Gamasutra claims it has 'confirmation' that Onlive has "laid off its entire staff", citing an affected employee.

Rough time for the employees. :S

Well it said in the OP that the service would continue, here is more on this. I'd wager the mystery buyer is MS in response to Sony's cloud gaming acquisition.

I'm fine with digital purchases for the PC. Not so much with consoles. Still, it's sad to see an entire staff lose their jobs. I'm not familiar with OnLive though. What was their service like, compared to the competition?

You can't really throw digital distribution in with a streaming service like this, digital downloads live on your HDD/SSD where you can play them offline at any time, whereas streaming games through something like this obviously requires a constant connection. I predicted this service wouldn't be around for long and it looks like its starting to fall apart, digital distribution on the other hand is getting bigger and bigger and WILL replace physical eventually.

You can't really throw digital distribution in with a streaming service like this, digital downloads live on your HDD/SSD where you can play them offline at any time, whereas streaming games through something like this obviously requires a constant connection. I predicted this service wouldn't be around for long and it looks like its starting to fall apart, digital distribution on the other hand is getting bigger and bigger and WILL replace physical eventually.

It was too ambitious on their part. They wouldn't be needing a bankruptcy/buyout if this concept had been in place 5-10 years down the line.

Too ambitious? I don't think so. They probably just couldn't afford the operating cost anymore. Onlive is worth way more and superior to Gaikai, and if someone bought them then Onlive was was probably snatched up too. I think that is what probably happened because layoffs usually don't happen that way. Or do they? Announcing layoffs and bankruptcy the same day and employees were in the dark. Its just sounds too fishy too me. Maybe someone bought them up and they can't speak about it yet. It makes sense to me as to why they were laid off so suddenly.

You don't go bankrupt if somebody is buying you out. You go bankrupt because expenses are exceeding income and debt is increasing beyond credit available.

Somebody could pick up the assets while it is in bankruptcy but that usually ends up dissecting the assets, holding the good, tossing the rubbish. Streaming gaming, at the source side, requires a huge fatpipe, very expensive, and essentially a supercomputer farm, also very expensive. Since they didn't have their own games, Onlive had to get into all kinds of licensing agreements with many developers to stream their games.

This means Gaikai is losing their main competition. Sony doesn't have the game licensing problem, there is enough past, present and future IP to stuff the pipe. Sony also has the integrated hub of Playstation Mobile now, so it doesn't need to make deals with different platform developers like Onlive did. The Onlive technology wasn't the problem, it was the huge overhead of the business model.

Pacing in wait of Sony's imminent DOOM!...since 2006

PS4 - The Only Hardcore Gaming Console = All Your Baserape Are Belong To Us

You don't go bankrupt if somebody is buying you out. You go bankrupt because expenses are exceeding income and debt is increasing beyond credit available.

Actually, it stated that they are seeking bankruptcy alternative.

Somebody could pick up the assets while it is in bankruptcy but that usually ends up dissecting the assets, holding the good, tossing the rubbish. Streaming gaming, at the source side, requires a huge fatpipe, very expensive, and essentially a supercomputer farm, also very expensive. Since they didn't have their own games, Onlive had to get into all kinds of licensing agreements with many developers to stream their games.

It stills sounds like they may have been bought out to me. The article stated that the service itself is not shutting down. Only the name won't exist anymore. This is evidence they they may have been bought out.

Jaquet has also told Mashable, "no comment on the news other than to say, the OnLive service is not shutting down". Jaquet refers specifically to the OnLive service however, and doesn't confirm or deny the layoffs.

This means Gaikai is losing their main competition. Sony doesn't have the game licensing problem, there is enough past, present and future IP to stuff the pipe. Sony also has the integrated hub of Playstation Mobile now, so it doesn't need to make deals with different platform developers like Onlive did. The Onlive technology wasn't the problem, it was the huge overhead of the business model.

No, it doesn't mean that Gaikai is losing competition. If anything, it says that competition is about to get stiffer. What if they were bought by Google, MS, Apple, or some other rich corp that has this in their plans? I still say someone has bought them out and it has to be some corp with a lot of money because OnLive is worth billions.

Same here. I know they were having some issues with operation cost about a year or two ago. If they have been bought out by someone then next gen could be very interesting. It sounds to me like they have been and are just getting rid of the ONlive name itself. I don't see the service leaving with the possibility of cloud gaming in the near future.

You don't go bankrupt if somebody is buying you out. You go bankrupt because expenses are exceeding income and debt is increasing beyond credit available.

Somebody could pick up the assets while it is in bankruptcy but that usually ends up dissecting the assets, holding the good, tossing the rubbish. Streaming gaming, at the source side, requires a huge fatpipe, very expensive, and essentially a supercomputer farm, also very expensive. Since they didn't have their own games, Onlive had to get into all kinds of licensing agreements with many developers to stream their games.

This means Gaikai is losing their main competition. Sony doesn't have the game licensing problem, there is enough past, present and future IP to stuff the pipe. Sony also has the integrated hub of Playstation Mobile now, so it doesn't need to make deals with different platform developers like Onlive did. The Onlive technology wasn't the problem, it was the huge overhead of the business model.

If Sony thinks that an online service with only their IP's, then it will fail. Granted, it's an awesome way to supplement this type of service but ANY online service will need the likes of EA, Ubi, Activision, etc.

I don't think so. They probably just couldn't afford the operating cost anymore.

You just made my point. Yes, too ambitious, the company that bought them out has substantial financial backing because Onlive couldn't afford their own costs anymore - They never revealed subscription numbers nor was it even taken seriously in the industry because of how ahead the concept is, otherwise they wouldn't be needing a buyout if they were doing any better.

Originally Posted by Sub-stance1

Onlive is worth way more and superior to Gaikai, and if someone bought them then Onlive was was probably snatched up too. I think that is what probably happened because layoffs usually don't happen that way. Or do they? Announcing layoffs and bankruptcy the same day and employees were in the dark. Its just sounds too fishy too me. Maybe someone bought them up and they can't speak about it yet. It makes sense to me as to why they were laid off so suddenly.

38 Studios announced mass layoffs, closure and bankruptcy on the same day so it's not all that strange.

You just made my point. Yes, too ambitious, the company that bought them out has substantial financial backing because Onlive couldn't afford their own costs anymore - They never revealed subscription numbers nor was it even taken seriously in the industry because of how ahead the concept is, otherwise they wouldn't be needing a buyout if they were doing any better.

So, by your logic sony is too ambitious too since they are struggling financially. I don't think it's being too ambitious because in the end it is paying off. I think it was a very smart move.
Some businesses are created to be bought out and it wouldn't surprise me if this was one of them.

38 Studios announced mass layoffs, closure and bankruptcy on the same day so it's not all that strange.

Apples to oranges dude. 38 studios just had poor management and it didn't happen on the same day. The staff works for weeks without pay so they probably weren't as blindsided. Anyways, it looks like I was spot on when I guessed ONlive was bought. When Gaikai was bought I knew it was a matter of time before they were too.

So, by your logic sony is too ambitious too since they are struggling financially. I don't think it's being too ambitious because in the end it is paying off. I think it was a very smart move.
Some businesses are created to be bought out and it wouldn't surprise me if this was one of them.

Apples to oranges dude. 38 studios just had poor management and it didn't happen on the same day. The staff works for weeks without pay so they probably weren't as blindsided. Anyways, it looks like I was spot on when I guessed ONlive was bought. When Gaikai was bought I knew it was a matter of time before they were too.

So, by your logic sony is too ambitious too since they are struggling financially. I don't think it's being too ambitious because in the end it is paying off. I think it was a very smart move.
Some businesses are created to be bought out and it wouldn't surprise me if this was one of them.

I don't think you're understanding so let me be as concise as I can.

-Onlive, the company, was in no financial position to support itself for a long period of time.
-The concept is a great idea for the future but keeping itself afloat until it's widely accepted costs money(Which won't be for years).
-Onlive could not survive so it was bought by a company with substantial funding.

That's the point myself, AaronSOLDIER and Rapture are making, they were too ahead of themselves with this idea. Guess why Gaikai was recently seeking buyers until Sony snatched it?. They simply can't afford to keep their company running.

Originally Posted by Sub-stance1

Apples to oranges dude. 38 studios just had poor management and it didn't happen on the same day. The staff works for weeks without pay so they probably weren't as blindsided. Anyways, it looks like I was spot on when I guessed ONlive was bought. When Gaikai was bought I knew it was a matter of time before they were too.

My point was that it is possible for layoffs, closure and bankruptcy to happen all at once and that it wasn't all that strange.

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